May 15, 2014 / 8:37 AM / 3 years ago

UPDATE 2-London Stock Exchange posts 50 pct revenue increase

* Revenue up 50 pct to 1.09 bln pounds

* Adjusted pre-tax profit up 17 pct to 514.7 mln pounds

* CEO says eyeing expansion into futures market (Adds CEO comment, detail)

By Freya Berry

LONDON, May 15 (Reuters) - The London Stock Exchange said on Thursday that full-year revenue rose 50 percent helped by the recently purchased LCH.Clearnet and firms returning to stock markets, and hinted it was seeking to expand its futures division.

The exchange group said revenue for the year to March 31 was 1.09 billion pounds ($1.8 billion), up from 726.4 million and above analysts’ expectations of 1.05 billion in an LSE-compiled survey.

Adjusted profit before tax was up 17 percent at 514.7 million pounds.

Chief Executive Xavier Rolet said that a diversification drive to expand capital markets infrastructure had boosted earnings, adding that the group was looking to expand its futures division through organic growth.

“Clearly there are no futures platforms for sale. Our approach will have to be organic,” Rolet said.

“We are happy to share governance in terms of equity participation ...look forward to future initiatives from us that involve our customers.”

A further expansion into futures would be the latest in a struggle among exchanges for the derivatives market. The LSE began FTSE 100 futures trading in 2011 after its acquisition of the indexes business, shortly after a similar move from NYSE Euronext.

Under Rolet, the LSE has sought to broaden its earnings, moving into strong potential growth areas to offset a squeeze on profits from falling trading volumes in an uncertain economic climate and increased regulation.

The bourse also said this week that it was eyeing Seattle-based asset manager and stock index firm Russell Investments, in a deal potentially worth around $3 billion.

Rolet declined to comment but said the United States represented a “unique growth opportunity”.

LSE acquired a majority stake in Anglo-French clearing house LCH.Clearnet a year ago. It said it expected to deliver 60 million euros of savings in 2015, ahead of its 23 million euro target, through job cuts and restructuring. It declined to give further details.

LCH.Clearnet had revenue of 263 million pounds in the year to March 31.

The group was also helped by the return of companies and investors to capital markets, saying it had seen firms raise more than 34 billion pounds in equity on its platforms in the past year.

London has proved a popular destination for initial public offerings, with well-known brands such as Poundland and JustEat making their market debuts in 2014. LSE’s capital markets division pulled in 309.5 million pounds, up 16 percent.

The group proposed a final dividend increase of 4.5 percent to 20.7 pence a share.

Shares in the LSE were up 1.9 percent at 0834 GMT.

($1 = 0.5960 British Pounds)

$1 = 0.7294 Euros Reporting by Freya Berry; Editing by David Goodman and Jason Neely

Our Standards:The Thomson Reuters Trust Principles.
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